Reading, listening to, and questioning America... from the southern Great Plains

Platinum ...or blink

If it's going to come down to a trillion-dollar platinum coin, we might as well understand what it is and isn't. I see it as that moment in the movies when the priest, dealing with the devil incarnate, holds up his little cross. The devil then evaporates or melts or something else that costs about a trillion in special effects and makes little boys incredibly excited.

The coin isn't actually through-and-through platinum, weighing a ton, carried by federal employees in a shrouded van (accompanied by noisy police cars) to the Federal Reserve and credited to our account there. Instead it's a Constitutional special effect in which the president accepts the Constitutional opportunity to mint a "commemorative" coin worth a conceptual trillion dollars as a bailout for a group of legislators who refuse to take up their normal responsibilities. It's a fake toad in a real garden.

In case you’re wondering, no, this wouldn’t be an inflationary exercise in printing money. Aside from the fact that printing money isn’t inflationary
under current conditions, the Fed could and would offset the Treasury’s
cash withdrawals by selling other assets or borrowing more from banks,
so that in reality the U.S. government as a whole (which includes the
Fed) would continue to engage in normal borrowing. Basically, this would
just be an accounting trick, but that’s a good thing. The debt ceiling
is a case of accounting nonsense gone malignant; using an accounting
trick to negate it is entirely appropriate.

But wouldn’t the coin trick be undignified? Yes, it would — but better
to look slightly silly than to let a financial and Constitutional crisis
explode. ...Paul Krugman, NYT

It's fully within the president's powers to do this. If we're talking about right now, it's also a reproof -- in the guise of some theatre of the absurd -- aimed at a group in Congress that didn't do its job. As Krugman points out, a stark reality lies behind all this craziness.

Under the Constitution, fiscal decisions rest with Congress, which
passes laws specifying tax rates and establishing spending programs. If
the revenue brought in by those legally established tax rates falls
short of the costs of those legally established programs, the Treasury
Department normally borrows the difference.

Lately, revenue has fallen far short of spending, mainly because of the
depressed state of the economy. If you don’t like this, there’s a simple
remedy: demand that Congress raise taxes or cut back on spending. And
if you’re frustrated by Congress’s failure to act, well, democracy means
that you can’t always get what you want. ... Paul Krugman, NYT

In this case, because Congressional Republicans haven't... Oh, well. You know.

There are other ways of dealing with the problem of a fake cliff in a real America.

... The platinum coin may not be the only option.
Maybe the president can simply declare that as he understands the
Constitution, his duty to carry out Congressional mandates on taxes and
spending takes priority over the debt ceiling. Or he might be able to
finance government operations by issuing coupons
that look like debt and act like debt but that, he insists, aren’t debt
and, therefore, don’t count against the ceiling.

Or, best of all, there might be enough sane Republicans that the party will blink and stop making destructive threats.

Unless this last possibility materializes, however, it’s the president’s
duty to do whatever it takes, no matter how offbeat or silly it may
sound, to defuse this hostage situation. Mint that coin! ...Paul Krugman, NYT

___

Wish I'd said it that way:

The argument for the coin is basically that whether we go into default
or avert it with the coin, either way we’re going through a banana
republic-style crisis, so better to do that without also going through a
massive financial meltdown. I still don’t believe the GOP’s default
threat is anything but an empty ruse. ...Greg Sargent, WaPo

Which, I mean to say, above, is why the platinum coin concept is so delicious. It's meeting an empty ruse with a humorous gesture. If, as some say, Obama has moved into his Lee Atwater phase, then one could also see the platinum coin as a reminder to Republicans that Obama stands ready to hand them the suicide pistol.